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Action

Final Regulations; Correction.

Summary

On October 29, 2010, the Department of Education published in the Federal Register (75 FR 66832) final regulations for improving integrity in the programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA), by amending the regulations for Institutional Eligibility Under the HEA, the Secretary's Recognition of Accrediting Agencies, the Secretary's Recognition Procedures for State Agencies, the Student Assistance General Provisions, the Federal Family Education Loan (FFEL) Program, the William D. Ford FederalDirect Loan Program, the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program, the Federal Pell Grant Program, and the Academic Competitiveness Grant (AGC) and National Science and Mathematics Access to Retain Talent Grant (National Smart Grant) Programs. This document makes several corrections to the October 29 final regulations, including in the preamble discussion and the regulatory text.

You may view this document, as well as all other Department of Education documents published in the Federal Register, in text or Adobe Portable Document Format (PDF), on the Internet at the following site: http://www.ed.gov/news/fedregister/index.html. To use PDF, you must have Adobe Acrobat Reader, which is available free at this site.

Note:

The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: http://www.gpo.gov/fdsys.

1. On page 66857, in the third column, in the fourth full paragraph labeled as the Discussion section, the words “enrolled in payment periods or assigned to the 2011-12 and subsequent award years” are corrected to read “enrolled in payment periods assigned to the 2011-12 and subsequent award years”.

2. On page 66858, in the first column, in the second paragraph labeled as Discussion, the last sentence of that paragraph is corrected by adding the words “do not” between the words “regulations” and “require”, so that the sentence reads: “While these final regulations do not require the creation of a State licensing agency, a State may choose to rely on such an agency to legally authorize institutions to offer postsecondary education in the State for purposes of Federal program eligibility.”

3. On page 66862, the chart and its notes are removed and the following corrected chart and notes are added in their place to clarify the items in the third column labeled “Approval or licensure process” that correspond to Business entities and Charitable organizations and to correct the third bulleted note:

• Federal, tribal, and religious institutions are exempt from these requirements.

• A State must have a process, applicable to all institutions except tribal and Federal institutions, to review and address complaints directly or through referrals.

• The chart does not take into account requirements related to State reciprocity.

Educational institution

A public, private nonprofit, or for-profit institution established by name by a State through a charter, statute, or other action issued by an appropriate State agency or State entity as an educational institution authorized to operate educational programs beyond secondary education, including programs leading to a degree or certificate.

The institution must comply with any applicable State approval or licensure process and be approved or licensed by name, and may be exempted from such requirement based on its accreditation, or being in operation at least 20 years, or use both criteria.

Business

A for-profit entity established by the State on the basis of an authorization or license to conduct commerce or provide services.

The State must have a State approval or licensure process, and the institution must comply with the State approval or licensure process and be approved or licensed by name.

An institution in this category may not be exempted from State approval or licensure based on accreditation, years in operation, or a comparable exemption.

Charitable organization

A nonprofit entity established by the State on the basis of an authorization or license for the public interest or common good.

The State must have a State approval or licensure process, and the institution must comply with the State approval or licensure process and be approved or licensed by name.

An institution in this category may not be exempted from State approval or licensure based on accreditation, years in operation, or a comparable exemption.

4. On page 66862, in the first column, under the heading Institutions considered legally authorized under amended § 600.9, the fourth bullet is corrected by adding the words “by name” prior to the period of the first sentence so that it reads: “A nonprofit institution has a State charter as a postsecondary institution by name.”

5. On page 66865, in the second column, the words “by name” are removed from the eighth line in the column so the affected sentence reads: “We have amended proposed § 600.9 to provide that, if an institution is an entity that is established by name as an educational institution by the State and the State further requires compliance with applicable State approval or licensure requirements for the institution to qualify as legally authorized by the State for Federal program purposes, the State may exempt the institution from the State approval or licensure requirements based on the institution's accreditation by one or more accrediting agenciesrecognized by the Secretary or based upon the institution being in operation for at least 20 years.”

6. On page 66873, in the first column, under the paragraph labeled as (2), the sentence is corrected by adding the words “or entity” between the words “person” and “based”, so that the sentence reads: “Whether the commission, bonus, or other incentive payment is provided to any person or entity based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, which are defined as activities engaged in for the purpose of the admission or matriculation of students for any period of time or the award of financial aid.”

7. On page 66876, in the third column, under the paragraph labeled as (2), the sentence is corrected by adding the words “or entity” between the words “person” and “based”, so that the sentence reads: “Whether the commission, bonus, or other incentive payment is provided to any person or entity based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, which are defined as activities engaged in for the purpose of the admission or matriculation of students for any period of time or the award of financial aid.”

8. On page 66878, in the first column, in the paragraphs labeled as the Discussion section, in the third paragraph, the sentence is corrected by adding the words “or entity” after the word “person” and deleting the words “who is”, so that the sentence reads: “For this reason, we are making a change to § 668.14(b)(22)(ii) to provide that institutions may make payments, including profit-sharing payments, so long as they are not provided to any person or entity engaged in student recruitment or admission activity or in making decisions regarding the award of title IV, HEA program funds.”

9. On page 66878, in the paragraph labeled Changes that begins at the bottom of the first column, the sentence is corrected by adding the words “or entity” after the word “person” and deleting the words “who is”, so that the sentence reads: “We have revised § 668.14(b)(22)(ii) to clarify that, notwithstanding the ban in § 668.14(b)(22)(i), eligible institutions, organizations that are contractors to eligible institutions, and other entities may make profit-sharing payments, so long as such payments are not provided to any person or entity engaged in student recruitment or admission activity or in making decisions regarding the award of title IV, HEA program funds.”

10. On page 66895, in the third column, in the first paragraph, the words “or a second disbursement of Pell Grant funds,” are removed so that the sentence reads: “If the student has not begun attendance in enough courses to establish a half-time enrollment status, the institution may not make a first disbursement of a Direct Loan to the student (34 CFR 685.303(b)(2)(i)), although the funds are included as aid that could have been disbursed in the Return of Title IV Funds calculation.”

11. On page 66916, the paragraph labeled Discussion that begins at the bottom of the second column and ends in the third column is removed and the following corrected Discussion is added in its place to read as follows:

“Discussion: As noted elsewhere in this preamble, the Department enforces its regulations, including those in subpart F of part 668 within a rule of reasonableness. We strongly believe that the concerns voiced by many commenters have ignored this fact. For this reason, we agree to limit the reach of the ban on making substantial misrepresentations to statements made by any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs or those that provide marketing, advertising, recruiting, or admissions services. We have done this by narrowing the language in § 668.71(b) and the definition of the term misrepresentation. As a result, statements made by students through social media outlets will generally not be covered by these misrepresentation regulations. Also, statements made by entities that have agreements with the institution to provide services, such as food service, other than educational programs, marketing, advertising, recruiting, or admissions services will generally not be covered by these misrepresentation regulations.”

12. On page 66917, in the third column, the third paragraph is corrected to read as follows:

“With regard to the commenters who stated that the `capacity, likelihood, or tendency to deceive or confuse' language will be confusing, in general, we have no reason to believe that this language will have any such effect. However, we recognize that the word ‘capacity’ is subject to a broad range of interpretations, so we have revised the regulations to state that a misleading statement is one that has the tendency or likelihood to deceive or confuse.”

13. On page 66918, in the first column, the Changes paragraph incorrectly indicated that no changes were made to § 668.71(c). That paragraph is corrected to read as follows:

“Changes: We have revised § 668.71(c) to state that a misleading statement is one that has the tendency or likelihood to deceive or confuse.”